Business Times

CB awaits SC sanction to set up F&G trust

By Bandula Srimanna

The Central Bank is awaiting Supreme Court sanction to set in motion the vital process of settling aggrieved depositors of F& G Real Estate Co Ltd and F&G Property Developers (Pvt) Ltd. when the hearing into the Fundamental Rights (FR) plea resumes on December 17.

The stage is now ready for the setting up of the two Independent Trusts to start repayment of a sum of around Rs.8.3 billion to 5,600 depositors of the two failed companies. The Non Banking Supervision unit of the Central Bank has agreed to the formation of such Trusts in the Magistrate Court of Fort recently where its basic characteristics were outlined.

A senior official of the Central Bank told the Business Times that there must be a mechanism within the Trusts to complete the unfinished projects undertaken by the two companies and the 1/3rd and 1/6th personal assets promised by the directors must be obtained by the Trusts.

Those directors should not be freed of their responsibilities vis-à-vis the development of the businesses of the two companies, meaning that they or some of them should be part of the Trusts as they are aware of the assets of the companies, the official said. The Trusts should be administered by the Trustees or managers appointed by the Central Bank . He said that these details are to be finalized after the Supreme Court order which is to be made, on December 17.

Concurrent to the criminal investigations conducted and criminal proceedings taking place in the Magistrate’s Courts of Hulftsdorp and Fort against the two companies respectively, and their directors, at the instance of the Attorney General, the directors have agreed to a mechanism of establishing two Trusts subject to the orders of the Supreme Court. F&G Depositors Association officials expressed optimism that within four weeks after the Supreme Court approval on the Trust deeds , the mechanism of repayment would be worked out with the concurrence of the Attorney General’s Department and other relevant parties .

In a motion filed on behalf of F&G depositors, it has been cited that the Golden Key Group of companies has no role in the repayment mechanism of these two companies and F&G subsidiaries too would be excluded from the said mechanism of the Golden Key Group of companies.

The reason for this being that the scheme of repayment developed and pronounced by the Court on October 23 for the Golden Key Group has a clause to this effect which has caused a great deal of anxiety among the depositors. Therefore they urged the Supreme Court to provide some redress by considering this issue.

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